New regulations to speed up projects

January 29, 2016, thejakartapost.com

The government is committed to accelerating infrastructure development to boost the economy by issuing more regulations that will give legal protection to officials and developers.

One of the regulations, Presidential Instruction No. 1/2016, issued on Jan. 8, gives public officials the authority to revise or replace rules that hamper development work and to have land acquisitions processed more quickly.

Another stipulations in the instruction provides the authority to expedite the appointment of a construction firm to carry out a project.

At the moment, the country has a list of strategic projects that include 47 toll-roads, such as Manado-Bitung in North Sulawesi and Samarinda-Balikpapan in East Kalimantan.

“It [the presidential instruction] will have an impact in a lot of ways, especially for the permit issuance process,” Shuhaela from the Committee of Infrastructure Priorities Development Acceleration (KPPIP) said on Thursday.

She said one of the expected changes concerned the issuance of location permits for developers. It previously took a long time to secure permits for projects like the linking of Java’s transmission lines with Sumatra’s, which crosses through several provinces in South Sumatra and Banten.

“It was usually not done in parallel, so it took a long time. But with [the new instruction], it could be reduced to just one permit through the one-stop integrated service,” Shuhaela said.

A notable feature of the instruction is the attorney general and National Police now being able to run administrative checks on any alleged wrongdoing before escalating them to legal or criminal cases.

“The classic case was an Indramayu regent who was accused of wrongdoing in relation to a steam-fueled power plant [PLTU] project. But, he only made a decision aimed at speeding up the project. In future, [such cases] won’t lead straight to criminalization,” she said.

Another recent change is Presidential Regulation No. 148/2015 on land procurement for public projects, which shortens the required time for sharing information on land acquisitions with nearby residents to three days instead of 20.

President Joko “Jokowi” Widodo has aimed to push forward infrastructure development to boost economic growth, which fell short of expectation at merely 4.73 percent in the third quarter last year.

The President has planned a number of key projects such as 1,000 kilometers of new toll roads and 49 dams, as well as 24 commercial seaports within five years.

However, progress has been plagued by a shortage of government funding for the projects, including for land procurement.

National Development Planning Board (Bappenas) data shows that the government will need around|Rp 5,500 trillion (US$396.3 billion) for infrastructure projects in 2015-2019.

Indonesian Toll Road Association (ATI) chairman Fatchur Rochman said he welcomed the issuance of the presidential instruction, as it would ease the fear among officials and developers of committing crimes during infrastructure projects.

“This kind of thing scares officials overseeing land procurements. And with the regulation, I hope that toll roads crossing through forests, which previously took time as they had to be re-routed, will be made easier as well,” he said.

However, he said that the government needed to address its lack of land procurement funding as well, because project acceleration would not matter without the necessary capital.

According to Toll Road Regulatory Agency (BPJT) data, the necessary capital for toll-road land procurement in 2016 alone amounts to around Rp 13 trillion, while the available capital is around Rp 8 trillion, including a mere Rp 1.4 trillion from the state budget.

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